UK To Force Listed Companies To Report Emissions

Date:21-Jun-12Country: U.K.Author: Michael Szabo

Companies listed on the London Stock Exchange will be forced to publish their greenhouse gases from next year, Deputy Prime Minister Nick Clegg wrote late on Tuesday in the Guardian newspaper, a move that will link share prices with the cost of emitting CO2.

The plans, expected to be formally announced by Clegg at the opening of the Rio+20 sustainability conference in Brazil on Wednesday, will force around 1,800 firms listed on Britain's main stock market to report their emissions in corporate earnings reports starting next April.

The new rules, which are expected to be broadened out to include all large companies from 2015, are intended to push corporations to better manage their impact on the environment, their energy consumption and the link between profitability and greenhouse gas (GHG) emissions growth.

"Using resources responsibly is in business's own interests too. Pepsi depends on water, Unilever depends on fish stocks and agricultural land, and every firm relies on a stable fuel supply," Clegg wrote.

"While nine out of 10 chief executives say sustainability is fundamental to their success, only two out of 10 record the resources they consume."

However, the Institute of Environmental Management & Assessment said the full benefits of the programme will not be seen until it is rolled out to cover all of the UK's roughly 24,000 large businesses.

Some companies and lobby groups also argued that the rules will add another unnecessary layer to existing environmental regulations they face.

"Almost without exception (paper manufacturers) already report GHG emissions either through the EU Emissions Trading Scheme, the UK's Climate Change Act and the Carbon Reduction Commitment, as well as through returns to the appropriate regulators through statutory returns and resource efficiency programmes," the Confederation of Paper Industries said in a statement.

"It must seriously be questioned if an additional burden on such organisations would be effective in driving the reduction of emissions or better energy efficiency."

All big emitters under the EU trading scheme are forced to report emissions from their European installations, but the market does not force companies to publish their corporate carbon footprint.

Consultants PwC said the announcement was not unexpected.

"It won't be seen as a burden, given the wholehearted support for the decision from business during the consultation process. Of the four options under consideration, business backed mandatory reporting," said Alan McGill, a partner in PwC's sustainability and climate change unit.